On March 17, President Faustine-Archange Touadera of the Central African Republic (CAR) said his country is reviewing the law that recognizes bitcoin as a legal tender and has presented a draft of the adjustments to the ministerial committee of the Central African Monetary Union.
- The statement was made known at a recent one-day summit of the Heads of State of the Economic and Monetary Community of Central Africa (CEMAC) in Yaoundé. Touadera further reassured his peers that he remains committed to upholding the rules of the community.
- Following the Central African Republic's adoption of bitcoin as legal tender and the introduction of its own cryptocurrency, the sango coin, Touadera faced mounting criticism and pressure from other Heads of State in the union.
- As reported by Business in Cameroon, according to the final communiqué of the meeting, “the legal tender of the member states of the union [including the CAR] is the Central African Financial Cooperation Franc (CFA).” This means that both bitcoin and sango coin will no longer be considered legal tender in the CAR.
- To this, Touadera argued that cryptocurrencies are a new reality that was trivialized when the laws governing the monetary and financial policies of the CEMAC states were established. Nevertheless, he conceded that the CAR was working to adjust the law on cryptocurrency.
- According to the draft presented by the CAR, the law on crypto assets should now merely govern crypto-related transactions in the country alone.
- The phrase "without restriction and with an unlimited power of issuance in all transactions and any capacity, carried out by natural or legal persons, public or private" has been removed from the law.
- The draft also proposed to change the definition of cryptocurrency, removing the phrase "without the need for a central bank.”
"Cryptocurrencies offer various financial opportunities and that’s what we are looking for. However, we have no intention of leaving the community. We will certainly continue to respect the rules,” says Faustine-Archange Touadera.
- The Central African Republic became the first country in Africa and only the second in the world after El Salvador to adopt bitcoin as legal tender on April 22, 2022.
- The Bank of Central African States (BEAC), which serves as the central bank to the member states of CEMAC (Cameroon, CAR, Chad, Equatorial Guinea, Gabon and the Republic of Congo) immediately issued a letter to the CAR following its bitcoin adoption move.
- The bank’s governor, Abbas Mahamat Tolli, said the new bitcoin-as-legal-tender law would have a significant negative impact on the colonial franc monetary system and urged Touadera to reestablish strict compliance with the Monetary Cooperation Agreement.
- In the letter, Tolli further argued that CAR’s crypto law appeared to be establishing a Central African currency beyond BEAC’s control in a move that could also be seen as a challenge to the French colonial currency system.
- Since BEAC serves as the central bank to all member states of CEMAC, the CAR’s move to make bitcoin a legal tender was seen by the bank as a provocative move and a violation of CEMAC’s law.
- The Central African Republic recently announced that it was also working with relevant stakeholders to develop a crypto legal framework.
- This was despite the country’s top court ruling that the use of CAR’s native digital token was unconstitutional.